Media powerhouse Walt Disney (NYSE:DIS) reported third-quarter results after the closing bell on Tuesday. The COVID-19 pandemic slashed Disney's revenue and profits to the bone, but the company still reported positive adjusted earnings and free cash flow.
Disney's second quarter by the numbers
Disney's sales fell 42% year over year to $11.8 billion. Theme park revenue came in 85% lower and studio entertainment posted a 55% sales drop. Other divisions proved to be less vulnerable to coronavirus effects. For Disney's media networks, sales came in 2% below the year-ago reading. Direct-to-consumer (DTC) sales increased by 2%.
On the bottom line, Disney posted a $4.8 billion net loss from continuing operations. That works out to a loss of $2.61 per share under generally accepted accounting principles (GAAP). That loss includes a $5 billion non-cash charge for restructuring and intangible asset impairments related to Disney's international broadcast TV operations. Adjusted earnings came in at $0.08 per share after backing out these charges and other non-cash items.
The recently launched Disney+ video-streaming service reported 57.5 million subscribers as of June 27, up from 33.5 million three months earlier. ESPN+ subscriptions rose from 7.9 million to 8.5 million and total Hulu accounts increased from 32.1 million to 35.5 million over the same period. That adds up to 101.5 million subscribers.
"The global reach of our full portfolio of direct-to-consumer services now exceeds an astounding 100 million paid subscriptions -- a significant milestone and a reaffirmation of our DTC strategy, which we view as key to the future growth of our company," CEO Bob Chapek said in a prepared statement.
The year-over-year drops were steep but many investors had expected an even worse report from the House of Mouse. Disney's stock rose more than 4% in after-hours trading.